Niva Bupa shares slide 10% after block deal, wipes out recent gains

Shares of Niva Bupa Health Insurance slid nearly 10% over the past five days to ₹83, as of 2 pm on Monday, led by a sudden dip in the morning that wiped out the modest gains built through late May. Reports on a major stake sale by domestic private equity firm True North and Niva Bupa Health Insurance MD and CEO, Krishnan Ramachandran, likely triggered the share slump. 

Reports suggest that 13.2 crore shares are expected to be divested via the block deal.

True North-backed entity Fettle Tone and Ramachandran may offload up to 7.2% of the company’s equity through this transaction, news reports suggested.

The shares are being offered at ₹82 apiece, which is an 11% markdown from Friday’s closing price that was hovering around ₹93, valuing the deal at around ₹1,082 crore. Around 56.3 lakh shares reportedly exchanged hands in one of the block trades in the early trade activity.

Despite the recent volatility, the broader six-month trend for Niva Bupa remains positive. The stock has risen over 12% since the beginning of the year, climbing from around ₹74 to over ₹83. It gained momentum in April and May, driven by improving investor sentiment and steady operational performance. However, the June correction may reflect profit-booking or reactions to company-specific developments or regulatory cues.

Looking ahead, the company’s valuation remains relatively high with a P/E ratio of 69.46 and a market cap of ₹15,240 crore. The share is still trading well above its 52-week low of ₹68.54, but also far from its 52-week high of ₹109.34. For long-term investors, the recent dip may present a buying opportunity, but sustained performance will depend on the company’s ability to maintain profitability and navigate sectoral challenges in the health insurance space.